California Governor Arnold Schwarzenegger in His Final State of the State Address Proposes to Shift Funds from Prisons to Higher Education. (January 7, 2010)

Californian Governors have a four year term in office which is renewable once and Arnold Schwarzenegger's second term will end on January 3, 2011. Yesterday the Governator gave his final state of the state address in which he proposed a marked reduction of spending on the state's prisons, the money to be channelled toward a higher education system that is on its knees.

 An amendment he proposes to be introduced into the state's constitution would limit the state correctional budget to no more than 7% of state general fund revenue and guarantee that the University of California and California State University together would receive no less than 10%. If approved, the funding shift would begin in the 2011-12 financial year and be fully realized in 2014-15.

Governor Schwarzenegger said: "Spending 45% more on prisons than universities is no way to proceed into the future. What does it say about a state that focuses more on prison uniforms than caps and gowns? It simply is not healthy. I will submit to you a constitutional amendment so that never again do we spend a greater percentage of our money on prisons than on higher education."

The Chart depicts California's change in relative funding from the 1967-68 financial year through to 2009-10.

In the 1967-68 financial year, UC and CSU received 13.4% of the state's general fund. In 2009-10 the proportion had dropped to 5.9%. At the same time, the prison's share of the budget has more than doubled from 3.9% to 9.7%.

In the opinion of the governor, California needs to find ways to run its prisons more cost-effectively by allowing private prisons to compete with public prisons. Currently, he said, the state spends about US$50,000 a year per inmate while other US states spend US$32,000. "That's billions of dollars that could go back to higher education where it belongs and where it will serve our future."

The governor’s chief of staff, Susan Kennedy, said in an interview after the speech: "Those protests on the U.C. campuses were the tipping point. Our university system is going to get the support it deserves.”

Commenting on the proposal, University of California's President Mark Yudof said: "This is a bold and visionary plan that represents a fundamental restoration of the values and priorities that have made California great. I am extremely pleased that the governor understands how vital it is to return the University of California and the California State University system to solid financial footing."

The UC administration calculate that had such a funding formula been in place for the 2009-10 financial year, based on the state budget approved last summer, the ten University of California campuses would have received up to an additional US$1.7 billion in state funds — enough to significantly address the university's looming budget gap — while the prisons would have received roughly US$2.3 billion less.

For Governor Schwarzenegger's proposal to be incorporated into the state's constitution it first requires to be passed by a two-thirds majority in the state legislature in order to be placed on the ballot for the coming November election. Approval by a simple majority of voters would then ratify it. 

However, addressing current realities President Yudof said: "In the short term, however, there are still critical budget shortfalls that will require the attention of the governor and the Legislature."

The University of California has requested an additional US$913 million to restore funds the state cut over the last two financial years, to fund employer contributions to the UC Retirement Plan and to support the roughly 14,000 UC students for whom the state has provided no funding.